Authors: Alexandra Gold (Weinberg ’22) and Samuel Mestel (Weinberg ’20)

 

This year, NFL games are closer and more competitive than before. Two games in the first two weeks of the season ended in ties and as of week 6 “sixty-nine percent of all games have been within one score in the fourth quarter” (Fox Sports). Besides ties, scoring is high. The NFL is happy with these results, as close and high scoring games keep fans interested and viewership growing.

 

It’s difficult to pinpoint exactly what has caused this increasing parity in the league, but it seems like a reasonable conclusion that the collective bargaining agreements (CBAs) have been key factors in making the league more equal. The NFL has gone through various lockouts and creations of new CBAs to satisfy the needs of players, coaches, owners and its own administration. These CBAs have changed the league salary caps, salary allocations, and minimum team cash spending.

 

A new CBA was established in 2006 and implemented for the 2008 season. Before 2008, there was no minimum team cash spending specified, meaning that higher revenue teams like the New England Patriots and Washington Redskins had the ability to pay players more than low revenue teams such as the Arizona Cardinals and New Orleans Saints. The difference in revenue along with no salary cap contributed to inequality in the league. The 2006 CBA increased the salary cap by $7.5 million, making it $102 million (ESPN). It also helped reduce this gap by establishing a minimum team salary that is 84% of the salary cap. However, this minimum was not implemented properly and many teams did not follow this recommendation, contributing to the inequality of the league.

 

In the summer of 2011, the NFL was locked out for the first time since 1987. The players union, led by newly elected trial lawyer DeMaurice Smith, couldn’t reach a consensus with the NFL owners on an appropriate denomination of overall revenue that would be allocated towards the teams’ salary caps, which would be paid out to the players. After 161 days of fierce disagreement, the players union finally agreed upon a 47% allocation, up from the 42% that the owners were originally proposing. Along with the new percentage of revenue allocations to the players, there were also five new key aspects of the new CBA. These points included adjustments to the free agency process (unrestricted vs. restricted), new minimum salaries (up from before),  franchise tags adjustments, a new rookie wage-scale, and most importantly, a new league-wide cap floor. This newly implemented cap floor of 89% would go on serve to serve as the most relevant aspect of the new CBA to league-wide parity. The significance of this implementation is that teams must spend at least 89% of that year’s respective salary cap on players, up from 84% in the previous CBA. While this originally appeared to be a win for the players union, since more money would be allocated to individual players, this also became a vital component of the CBA for the NFL owners coalition as well, since it boosted league parity and in turn created new highs in media viewership, jersey sales, and overall fan base interest, especially for teams which had previously not been able to compete with larger market teams which were stereotypically higher spenders. Big market teams who had previously been able to dominate the free agent market by spending copious amounts of cash on available players now had many more teams to compete with. Everyone had to spend. Teams could no longer hide behind a false veil of throwing dollars. Skill and cunningness in the front office would serve to become the new determinant in the success of teams. The gap between the elite storied franchises and newer teams like the Houston Texans, formed in 2002, was closing.

 

Additionally, the new rookie wage scale meant that teams had to invest less of their salary cap in their draft picks, and could allocate more of their salary cap towards both impending and current free agents. When the Oakland Raiders drafted JaMarcus Russell in 2007, they had agreed to pay him out $68 million over 6 years as they essentially had no leverage and Russell refused to play until they signed this contract. This made him one of the highest paid players in the league without having ever played a snap. Russell was released after the 2009 season and hasn’t played since, leaving the Raiders on the hook for a contract of a player who wasn’t even playing. Under the new CBA, players could no longer do this. The newly implement rookie wage scale pre-determined the contract of all rookies, based on where they were drafted. Cam Newton, the first overall pick in the 2011 draft, now had an automatic contract of 4 years, 23 million dollars, with the 5th year team option that all teams could now exercise on first round picks. This is significantly less than previous contracts of 1st overall picks and was way safer for teams. Players had to actually play well to earn a 5th year option and could no longer simply coast after they got drafted and had agreed to an enormous signing bonus.

 

In order to quantify the change in parity of the league, we looked at the point differentials for all NFL games between 2008 and 2017. As shown in the graphs below, the standard deviations of the point differentials significantly decreased. Since 2013, the first year of implementation of the 2011 CBA, we’ve seen a pretty steep ascent in the parity of the NFL. The four year average standard deviation in point differential had decreased to 95.7 from a five year average of 106.9 (10%) before the new CBA was implemented.

 

Additionally, we looked at the change in simple rating system (SRS) before and after the implementation of the 2011 CBA. SRS is similar to point differential, except that it also takes strength of schedule into account. The average standard deviation of the SRS before the 2011 CBA was 6.5926 and after it was 5.9597, which was a 9.6% decrease. This suggests that changes in the 2011 CBA may have had a significant impact on league-wide parity.

 

 

Looking forward, the NFL’s current CBA expires in 2020, so what can we expect to see in a new CBA afterwards, and how can we expect in to affect league-wide parity? It’s important to note that a cap floor above 89% would be difficult to implement and would most likely have a negligible effect. Cap rollover and getting out of bad contracts is an essential part to team management and would be incredibly difficult to manage with a cap floor above 89%. It’s difficult to think that the new CBA will affect parity in any meaningful way whatsoever. As of now the cornerstone points of the 2021 CBA are expected to be concerned with player safety, practice regulations, and health insurance denominations to retired players, none of which should really impact on field performance. However, the question should be asked, have we reached the pinnacle of performance parity in the NFL? I think the answer is no, and that just has to do with ownership and management approaches across the league. Teams are constantly adjusting to a constantly changing league, and you’d expect for there to be peaks and troughs fluctuating across the coming decades.

 

Sources:

http://static.nfl.com/static/content/public/image/cba/nfl-cba-2006-2012.pdf

 

https://www.pro-football-reference.com/years/

 

https://nfllabor.files.wordpress.com/2010/01/collective-bargaining-agreement-2011-2020.pdf

 

https://www.foxsports.com/nfl/story/nfl-happy-with-more-scoring-close-games-101818

 

http://www.espn.com/nfl/news/story?id=2360258

 

https://www.forbes.com/lists/2006/30/06nfl_NFL-Team-Valuations_Revenue_2.html